The EIR will allow Sun Pharma to restart supplies from the Halol facility to US, its largest market.
Moneycontrol News
Sun Pharma, India's largest drug maker said on June 12 that it had received the Establishment Inspection Report (EIR) from the US Food and Drug Administration (FDA) for its crucial Halol facility in Gujarat indicating a closure of inspection.
"The agency concluded that the inspection is now closed and the issues contained in the Warning Letter issued in December 2015 have been addressed," Sun Pharma said in a statement to stock exchanges.
The Halol facility was inspected by USFDA between February 12 and 23.
“This is an important development for Sun Pharma. We remain committed to following the highest levels of quality and 24x7 cGMP compliance at all our manufacturing facilities globally,” the company said.
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The EIR will allow Sun Pharma to restart supplies from the Halol facility to the US.
Prior to the warning letter, Halol was contributing about $400 million in sales, which was nearly 15 percent of the company's total sales. The facility’s contribution later declined to about $250 million. US alone has contributed around 40 percent of Sun Pharma overall sales in FY18.
US revenue growth has fallen 34 percent YoY - as the company is struggling with pricing pressure in that market.
"Sun Pharma's US business has been under pressure since the warning letter, as it has not received any product approval from this facility in three and a half years. The facility contributes 8-10% of US sales for SUNP, currently - down from >15% at the time of warning letter," said Motilal Oswal in its report.
"Resolution of the Halol issue is critical for the company, as it would provide visibility on key approvals including Xelpros, Elepsia, Vagifem, etc. We expect incremental sales of USD100 million from this facility post resolution," the report added.